Critical Contrast: Arch Capital Group (NASDAQ:ACGL) & GAINSCO (OTCMKTS:GANS)

GAINSCO (OTCMKTS:GANS) and Arch Capital Group (NASDAQ:ACGL) are both finance companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, dividends, earnings, valuation, profitability, risk and institutional ownership.

Earnings & Valuation

This table compares GAINSCO and Arch Capital Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GAINSCO	N/A	N/A	N/A	N/A	N/A
Arch Capital Group	$16.21 billion	2.18	$4.44 billion	$14.90	6.30

Arch Capital Group has higher revenue and earnings than GAINSCO.

Analyst Ratings

This is a breakdown of current ratings for GAINSCO and Arch Capital Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GAINSCO	0	0	0	0	0.00
Arch Capital Group	0	5	11	0	2.69

Arch Capital Group has a consensus target price of $118.38, indicating a potential upside of 26.04%. Given Arch Capital Group’s stronger consensus rating and higher probable upside, analysts clearly believe Arch Capital Group is more favorable than GAINSCO.

Insider & Institutional Ownership

89.1% of Arch Capital Group shares are held by institutional investors. 73.5% of GAINSCO shares are held by insiders. Comparatively, 4.2% of Arch Capital Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares GAINSCO and Arch Capital Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GAINSCO	N/A	N/A	N/A
Arch Capital Group	33.86%	18.94%	5.62%

Summary

Arch Capital Group beats GAINSCO on 8 of the 9 factors compared between the two stocks.

About GAINSCO

GAINSCO, Inc. operates as a property and casualty insurance holding company. The company offers non-standard personal auto products, including coverage for third party liability, bodily injury, and physical damage, as well as collision and coverage for theft, physical damage, and other perils for an insured's vehicle. It is also involved in automotive sales and service, auto racing, and investment activities. The company offers its automobile insurance products under the GAINSCO Auto Insurance brand through independent partner agents and Website comparison shopping places. GAINSCO, Inc. was founded in 1978 and is based in Dallas, Texas.

About Arch Capital Group

Arch Capital Group Ltd., together with its subsidiaries, provides insurance, reinsurance, and mortgage insurance products worldwide. The company's Insurance segment offers primary and excess casualty coverages; loss sensitive primary casualty insurance programs; directors' and officers' liability, errors and omissions liability, employment practices and fiduciary liability, crime, professional indemnity, and other financial related coverages; medical professional and general liability insurance coverages; and workers' compensation and umbrella liability, as well as commercial automobile and inland marine products. It also provides property, energy, marine, and aviation insurance; travel insurance; accident, disability, and medical plan insurance coverages; captive insurance programs; employer's liability; contract and commercial surety coverages; and collateral protection, debt cancellation, and service contract reimbursement products. This segment markets its products through a group of licensed independent retail and wholesale brokers. Its Reinsurance segment provides casualty reinsurance for third party liability exposures; marine and aviation; motor reinsurance, whole account multi-line treaties, cyber, trade credit, surety, accident and health, workers' compensation catastrophe, agriculture, trade credit, and political risk products; reinsurance protection for catastrophic losses, and personal lines and commercial property exposures; life reinsurance; casualty clash; and risk management solutions. This segment markets its reinsurance products through brokers. The company's Mortgage segment offers direct mortgage insurance and mortgage reinsurance. The company was founded in 1995 and is based in Pembroke, Bermuda.